The aim of this study is to explore how ethical leaders stimulate creative behaviour among employees. By conducting a qualitative study among a sample of executive managers at a State-owned enterprise (SOE) in South Africa, it was ascertained that ethical leaders use their moral legitimacy to influence employees to explore, generate, champion and implement ideas. Furthermore, ethical leaders can directly influence employee creative behaviour using ethical guidance, integrity, support, employee orientation, powersharing, role-modelling and fairness. However, whilst ethical leadership may be effective in influencing employee creative behaviour, rigidity, self-interest, leadership changes, idea costs, idea timeliness, and idea relevance are important factors that impact creative behaviour efforts in SOEs. It is recommended that the leadership of SOEs and similar organizations establish centres of excellence where employees are actively required to explore and generate new ideas.